With Sprint Nextel Corporation (NYSE:S) sheds Nextel cloak
The 3-way merger that involved Sprint Nextel Corporation (NYSE:S), Softbank and Clearwire has finally been closed. 78% of the United States’ 3rd largest carrier is now controlled by Softbank, the Japanese telecom player. Softbank took over Sprint in a $21.6B
Cash-and-stock takeover. After a long struggle the Japanese company managed to navigate all hurdles. This included its spread-out battle with DISH, the satellite TV provider. The latter has also put forth a counter-bid of $25.5B on sprint.
In a change that had to happen, S dropped Nextel from its brand name. This is an indication that Nextel has confirmedly been shutdown. After the Softbank deal, the company has now officially assumed the Sprint Corporation name. The expensive Nextel acquisition had proved to be a drain on Sprint. A debt burden that it had been saddled post the acquisition had seen the company go though very difficult times.
The iDEN network shutdown and the Softbank backing will hopefully bring around a change for the better. Sprint needed some muscle power to fight bigger rivals like AT&T and Verizon who have dominated the wireless market for a long time now.
A hands-down victory
According to the deal, Sprint Nextel Corporation (NYSE:S) shareholders will be receiving $16.6B in cash. Instead of $5B the Sprint balance sheet would now get a boost of $8B. Softbank had to sweeten its deal and revise the cash component for shareholders. This was the only way Softbank could beat the DISH proposal hands down
The clear choice
In the end, Sprint has to almost double its bid for Clearwire to ward away the offer that DISH had put forth for the latter. Clearwire has an expansive spectrum holding. This acquisition will give Sprint the leverage it needs to build an indomitable network. Clearwire is the owner of 160MHz of airwaves in America’s 100 prime markets and it automatically gives Sprint a strong foothold there.